iM Update – October 13, 2017
Market Signals Summary:
The MAC-US model is invested.
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The MAC-AU is also invested. The recession indicators COMP and iM-BCIg do not signal a recession.
The MAC-US model generated a buy-signal 4/5/2016 and thus is invested in the stock-markets. The sell-spread (red graph) is above last week’s level and has to fall below zero to signal a sell.
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The MAC-AU model is invested in the markets after it generated a buy signal on March 21, 2016. The sell-spread is near last week’s level and has to fall below zero to signal a sell.
This model and its application is described in MAC-Australia: A Moving Average Crossover System for Superannuation Asset Allocations.
Figure 3 shows the COMP above last week’s level. No recession is indicated. COMP can be used for stock market exit timing as discussed in this article The Use of Recession Indicators in Stock Market Timing
Figure 3.1 shows the recession indicator iM-BCIg which is up from last week’s level. An imminent recession is not signaled .
Please also refer to the BCI page
The Forward Rate Ratio between the 2-year and 10-year U.S. Treasury yields (FRR2-10) is below last week’s level and far away from signalling a recession. The downward trend of the FRR2-10 has slowed.
A description of this indicator can be found here.